Our partners at WBRC in Birmingham, Alabama report on a growing threat to young children: Synthetic ID theft. It’s the fastest-growing form of ID theft, and something parents should be aware of. The scheme can take two forms. In one version, the fraudster uses a child’s real social security number (SSN) with a fake name to open lines of credit. In the other version of the scam, someone uses a random sequence of numbers as an SSN to open lines of credit, and then a child later gets assigned that number by random chance. In either case, this type of fraud can go undetected for years, since running credit checks for children has not been a common practice, historically.
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Congress passed a law earlier this year requiring credit bureaus create a shared database to prevent these fake accounts from damaging children’s credit, but it hasn’t been implemented yet.
Here are some tips to protect your family’s identity:
- Always be vigilant with your and your family’s personal information, only provide SSNs when necessary
- Check credit files from each major bureau once a year using Annualcreditreport.com
- Call For Action suggests getting one from a different bureau every 4 months
- If you have minor children over the age of 14, they can request their report the same way
- If your child is under 14, contact each major bureau directly to check your child’s file
- Consider placing a freeze on your children’s files (state laws on cost vary)
The law requiring credit bureaus use a shared database to reduce fraud also requires that freezing children’s credit be free. If you do freeze your child’s credit, keep in mind that you will need to retain the records of your freeze request in order to unfreeze your child’s credit years later, if and when they need to open a line of credit.